BriefingSeptember 2015

EPRS | European Parliamentary Research ServiceAuthor: Didier BourguignonMembers' Research Service

ENPE 568.329

Biomass for electricity and heatingOpportunities and challenges

SUMMARY

Biomass is a renewable energy source which can be used to produce electricity, heatand transport fuels. It accounts for roughly two thirds of renewable energy in theEuropean Union (EU). Although biomass can come from many different sources, woodis by far the most common.

Under EU legislation, biomass is carbon neutral, based on the assumption that thecarbon released when solid biomass is burned will be re-absorbed during tree growth.Current EU policies provide incentives to use biomass for power generation. Atpresent, there are no binding sustainability criteria for biomass at EU level, althoughsome exist at national and industry level.

Opportunities and challenges related to biomass have to do with greenhouse gasemissions (biomass can contribute to reducing carbon emissions, but emissions maynot be fully accounted for); resource availability (biomass can contribute to energysecurity, but its sources are finite); environment and human health (increased use ofbiomass for energy can have adverse effects on air quality, soil properties andbiodiversity). To address sustainability concerns, different responses have been putforward, including the principle of the cascading use of biomass, whereby it is usedmore than once, with energy conversion typically as the last step.

The European Parliament has called for EU sustainability criteria but has opposedlegally binding rules for prioritising uses of wood. Stakeholders have expressedopinions on greenhouse-gas accounting, sustainability criteria and the cascading use ofbiomass.

Wood logs, a form of solid biomass.

In this briefing: Background EU policy Opportunities and challenges Sustainability European Parliament's position Stakeholders' views Main references

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GlossaryBioenergy: energy derived from biomass, either through direct use as fuel or after processinginto liquids and gases.

Biomass: biological material derived from (recently) living organisms. Biomass includes wood,agricultural crops, waste and residues as well as manure.

Solid biomass: plant and animal biomass in solid form: woody materials (e.g. logs, chips,pellets, charcoal), solid agricultural waste (e.g. straw, rice husks, nut shells) and dry manure.

BackgroundBiomass has been used as a fuel since humans first learned to control fire. Traditionalbiomass refers to wood, charcoal, agricultural residues and animal manure being usedfor cooking and heating in households. Modern biomass for energy use can be dividedinto five broad categories: wood from forestry or wood processing; agricultural cropsgrown specifically for energy applications; residues from agricultural harvesting orprocessing; food waste; industrial waste and by-products from manufacturingprocesses.

Biomass is considered a renewable energy source because it can usually be renewed ina few decades. Currently, bioenergy accounts for roughly 10% of global energy supply;two thirds of the biomass is consumed in developing countries for cooking and heating.

Numerous biomass feedstocks can be converted using a variety of conversion routes inorder to produce three types of bioenergy: heat, electricity and transport fuels.Electricity and heat are generated through combustion of solid biomass or biogas insystems ranging from small-scale domestic stoves to industrial power or heating plants.Burning solid biomass in traditional power plants alongside fossil fuels, in a processknown as 'co-firing', is seen as a cost-effective option that makes use of existing coalplants with only minor adjustments. In addition, combined heat and power, also knownas 'co-generation', can be used to convert biomass into electricity, while extractingwaste heat for supplying it to district heating or industrial facilities. Transport fuels, alsoknown as biofuels, are mainly derived from energy crops, although advanced biofuels(based on waste and residues) are under development. For more details on biofuels,read the EPRS briefing on EUbiofuels policy.

The final energy consumptionfrom biomass in the EU28 hasgrown from 72 million tonnes ofoil equivalent (Mtoe) in 2004 to128 Mtoe in 2013. Although thetotal share of biomass amongrenewable energy sources hasremained stable (at 65%) over thepast decade, the share of biomassin the overall energy mix hasgrown from 4% in 2004 to 7.7% in2013. At present, 46% ofrenewable energy in the EUcomes from solid biomass

Figure 1 – Renewable energy sources in EU28, in million tonnesof oil equivalent (Mtoe) (2004-13)

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Solid biomass Liquid biofuelsBiogas Biomass from municipal wasteHydropower Wind powerOther renewables Share of biomass in total energy mixShare of biomas in renewables

Data source: Eurostat (nrg_100a), 2015.

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(almost exclusively wood). According to the European observatory on renewableenergy, in 2013, solid biomass accounted for 3% (7 Mtoe) of the electricity produced inthe EU and 15% (8.8 Mtoe) of the heat produced in industrial units. A further 63.5 Mtoeof heat from biomass was produced by domestic users. The per capita use of biomassfor heating and electricity in EU Member States in northern Europe is significantlyhigher than the EU average. In 2013, the European solid biomass and biogas sectorsgenerated turnover of close to €42 billion and employed 380 200 people, includingmany in rural areas.

Conversion routes

Thermochemical conversion pathways include combustion, the most widely used route to turnbiomass into energy; gasification (based on a partial oxidation process), converting biomass intobiogas; pyrolysis (based on thermal decomposition in the absence of oxygen), converting drybiomass into oil, charcoal or biochar; and hydrogenation, converting vegetable and animal oilsinto liquid fuel. Biochemical conversion pathways include anaerobic digestion (in the absenceof oxygen), converting biomass into methane; transesterfication, used to produce biodieselfrom oils; and fermentation (followed by distillation), used to produce bioethanol from sugars.

A report by the International Renewable Energy Agency (IRENA) indicates that manybiomass power technologies are mature and production costs can be in the range ofelectricity generation rates in the OECD, in particularwhere low-cost agricultural or forestry waste isavailable. The European Commission notes,however, that in most cases, electricity generationfrom biomass currently requires some level of publicfinancial support.

The European Commission expects, based onnational estimates, that the supply of biomass forheating and electricity will continue to increase(from 103.3 Mtoe in 2012 to 132 Mtoe in 2020), withthe relative share from agriculture (mainly residuesand agricultural by-products) and biodegradablewaste increasing significantly. The EuropeanCommission also expects imports from thirdcountries to increase by 2020, largely in the form ofwood chips and wood pellets.

EU policyThe policy framework is set by the 2009 Renewable Energy Directive, establishing amandatory 20% share of renewable energy sources in the EU final energy mix by 2020.The Directive, which lists biomass as a renewable energy source, aims inter alia toachieve greater mobilisation of existing timber reserves. It mandates Member States todraft national renewable energy action plans and sets conversion efficiency thresholdsabove which Member States may promote bioenergy technologies.1

Under the EU's and the global2 regulatory framework, greenhouse gas emissions (GHG)associated with biomass combustion are not included in the energy sector, based on theassumption that carbon released when solid biomass is burned will be re-absorbedduring tree growth; however, resulting changes in carbon stocks are reflected in theagriculture, forestry and other-land-use sector (currently not subject to emission

Wood pelletsWood pellets, small cylinders producedfrom compacted sawdust, are beingused increasingly as a source ofbioenergy in power plants, domesticheating appliances, residential heatingsystems and industrial boilers for heatproduction. According to data from theEuropean Biomass Association,18.3 million tonnes of pellets (or 79% ofglobal consumption) were consumed inthe EU in 2013. A third is now beingimported, mainly from the USA, Russia,Ukraine and Belarus. Global wood pelletconsumption is projected to rise from22 to 50-80 million tonnes by 2020.

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reduction commitments). In 2013, Parliament and Council adopted a Decision definingaccounting rules for GHG from land use, land-use change and forestry, as a first steptowards the inclusion of those activities in the EU emissions-reduction commitment. Atglobal level, the REDD+ Programme aims to address emissions from deforestation andforest degradation (accounting for nearly 20% of global GHG emissions) and to promotesustainable forest management.

In the EU, policies provide incentives to use biomass for electricity generation. On theone hand, because its GHG emissions do not fall under the EU Emissions TradingScheme (ETS), biomass has an advantage over (fossil) energy sources subject to the EUETS. A 2011 report by the International Energy Agency notes that EU ETS allowances in aprice range of €15-25 per tonne may encourage the use of biomass as a fuel, but are toolow to incentivise the construction of new biomass plants. Moreover, financialincentives at national level (for instance in the UK) have played a key role in theconversion of coal power plants into wood plants.3 A 2012 study by the InternationalInstitute for Sustainable Development estimates that electricity generation frombiomass in the UK and Germany received deployment subsidies of between 5 and 9eurocents per kWh over the period 2000-09.

The Renewable Energy Directive does not specify any sustainability criteria for biomass(although it sets such detailed criteria for biofuels). In 2010, the European Commissionlisted non-binding sustainability criteria regarding biomass for electricity and heating,and recommended their adoption by Member States. However, their implementation ispatchy4 and some stakeholders have expressed concerns that divergent nationalsustainability criteria can be a barrier to (intra-EU) trade in solid biomass. Nevertheless,there are a series of sustainability schemes relevant to energy biomass: criteria andindicators for sustainable forest management by Forest Europe, an intergovernmentalbody; certification schemes for forestry products (e.g. FSC and PEFC); and industry-ledinitiatives (e.g. the sustainable biomass partnership or the ENplus certification for woodpellets).

As regards forest biomass, the European Commission adopted a new EU forest strategyin 2013, addressing the increasing use, overall, of forests for a variety of purposes,including bioenergy. It aims to ensure and demonstrate that all EU forests are managedaccording to sustainable forest management principles by 2020.

The European Commission has announced that by 2017 it will put forward a newRenewable Energy Directive for the period beyond 2020, aimed at reaching at least 27%of renewable energy in the EU energy mix by 2030 and setting out, among other things,a 'bioenergy sustainability policy'.

Opportunities and challengesGreenhouse gas emissionsBurning solid biomass (the most common biomass conversion route) emits more CO2

per unit of energy generated than fossil fuels, because wood is less energy-dense andcontains more moisture. However, when looking at the wider cycle of emissions,biomass can reduce CO2 emissions. European Commission data published in 2010(updated in 2014) estimate savings in GHG emissions for various types of biomass,compared with typical fossil-fuel emissions. The data indicate that biogas producedfrom wet manure generates most savings,5 reaching up to 100%; biogas produced frommaize (whole crop) generates emission savings ranging from negative values (emissions

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higher than fossil fuel reference) to more than 50%, depending on the technologyadopted; and solid biomass combustion produces emissions savings generally above60% both for power and heat produced, and reaching over 70% in some cases.

The GHG balance of electricity and heat generation from biomass depends on the typeof feedstock used, the amount of fertiliser used, carbon stock changes due to land use,transport mode and distance travelled, amount of energy used in processing (includingfarming) and efficiency of the conversion pathway. A 2014 comparison of life cycleanalysis studies of forest bioenergy carried out for the European Commission suggests itis possible to identify low- and high-risk scenarios in terms of GHG emissions from forestbioenergy. The report adds that, as a given feedstock can be involved in both low- andhigh-risk scenarios, risks cannot be limited or removed by policies favouring certainfeedstocks and discouraging others.

Biomass GHG emission accounting under the KyotoProtocol and the Renewable Energy Directive is basedon changes in forest carbon stocks and emissionsfrom the combustion of biomass being reflected inthe agriculture, forestry and other land use sector. A2013 study by the Commission's Joint ResearchCentre identifies this as a key aspect for the validityof the assumption of biomass carbon neutrality.However, some experts have been critical of GHGaccounting implementation: emissions from biomassimports from most third countries are not accountedfor; emissions from the combustion of biomass areomitted (although compensated by potentialregrowth); the accounting methods used may eitherpartially or fully hide emissions from biomass use.6

Resource availabilityBiomass can contribute to the security of energy supply in two main ways. Firstly,because it can be stored easily in various forms (e.g. wood and its derivatives, biogas,biofuels), biomass is a stable renewable energy source that can balance the use ofvariable renewable sources such as wind and solar energy. Secondly, biomass cancontribute to reducing reliance on specific energy sources in third countries, in so far asthe majority of biomass demand is met from domestically produced raw material.Indeed, the EU forest area has grown by about 2% over the past decade.

However, there has been some debate about the availability of biomass as a resource.In 2010, a report drafted for the European Commission (known as the 'EUwood' study)estimated that although demand for wood for material and energy use could probablybe met by 2020, supply would be insufficient to meet demand by 2030. The studysuggests that 58% of the theoretical potential of European forests could be exploited;the main constraints identified were environmental considerations related to soilproductivity and uncertainties linked to attitudes of private forest owners, who control60% of EU forests. However, a study published in 2014 by the European Forest Institutehighlights a series of aspects: wood demand for material uses is likely to be lower thanforecast as a result of a decline in the pulp industry and the impact of the financial crisis;international trade is not taken into account in the EUwood study; and marketmechanisms can help to bridge gaps between supply and demand.

Carbon debtThe assumption that solid biomass iscarbon neutral is subject to conditions.In the short term, burning wood emitscarbon and decreases the capacity tosequester carbon (wood has a carboncontent of around 50%), therebycreating a 'carbon debt'. The GHGcompensation occurs with regrowthover a much longer time frame, knownas the 'carbon payback period'.According to the European EnvironmentAgency, depending on the assumptionsused in calculations, the payback periodmay be estimated at 5–30 years (forforest residues), to over a century (forintensified harvesting of old trees).

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The large-scale development of bioenergy from forests and agriculture could haveindirect impacts on other sectors relying on biomass as raw materials(e.g. construction, pulp and paper industry, and biochemistry) or induce (indirect) land-use change. Competition is likely to increase, especially as regards lower-grade wood,which could push wood prices upwards.

Impacts of EU energy biomass policy on third countries

Given the unequal distribution of global vegetation stocks (as shown in a map published by theUS Department of Energy) and world trade flows, EU energy biomass policy is likely to impact onthird countries. The European biomass industry considers the southeastern region of the UnitedStates and British Columbia, Canada, as important sources of biomass fuel with strictregulations, a long-established history of responsible forestry, and great potential for increasedproduction. However, NGOs have raised concerns about the use of whole trees to producewood pellets intended for export to Europe. The use of whole trees, as opposed to waste andresidues, could worsen the pellets' GHG balance and have a higher negative impact onbiodiversity.

According to a European Parliament study from 2012, South America and Africa are expected tobecome significant exporters of biomass to the European Union. While this could have positiveeffects for local populations (e.g. in terms of job creation or improved forest management), itcould also impair the access of rural communities to land and water, adversely affect food andenergy security of local populations, and lead to deforestation and forest degradation, asnatural forests are replaced with monoculture plantations.

Environment and human healthIncreased use of biomass for energy can have detrimental impacts on air quality. Woodburning, in particular, emits particulate matter (PM), benzene, benzo(a)pyrene (BaP)and other substances into the air, with significant effects on human health, for instanceasthma and respiratory diseases. The European Commission estimates that solid fuelcombustion in households accounts for about one third of all PM emissions, which areconsidered to cause 430 000 premature deaths a year in the EU.

The removal of residues (typically branches and tree tops left after felling, as well asstumps and roots) for bioenergy can have an impact on soil properties. Extracting forestresidues, which have a very high nutrient concentration, may affect soil quality, hindernatural regeneration and limit future production potential. On cropland, removingstraw traditionally used as a soil improver may increase soil erosion, reduce waterretention and limit soil temperature regulation (although it may be beneficial in someareas). Harvesting forest residues may reduce the amount of carbon stored intemperate forests, since carbon is stored primarily in soils rather than in above-groundbiomass. A 2010 meta-study found that in temperate forests, (increased) harvestingresults in an average 8% decrease in total soil carbon.

Biomass extraction can also affect biodiversity, in particular through deforestation,degradation of forest ecosystems and conversion of natural forests to tree plantations.Residue harvesting may affect species living off biomass residues such as dead wood orcrop roots. Changes in the structure of forest soils may induce harmful effects onbiodiversity. However, positive impacts on biodiversity may also occur if forests becomebetter managed or when invasive alien species are removed.

SustainabilitySustainability concerns have been raised from various angles. The 2011 EuropeanForest Sector Outlook Study II published by the United Nations Economic Commission

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for Europe (UNECE) found that the use of high volumes of wood, in order to meetrenewable energy targets by 2030, could result in a deterioration of forest resourcesand ecosystems. In the agricultural sector, the European Commission notes thatincreased biomass supply from the most likely sources (dedicated crops such as maizeand residues such as straw) could have a negative environmental impact on soil, waterand biodiversity. A 2014 study carried out by the International Institute forSustainability Analysis and Strategy (IISAS) for environmental NGOs underlines the lackof consistency between EU bioenergy, forest and waste policies; the partial reflection, inincentive schemes, of GHG emissions from bioenergy; and the absence of coherentsustainability regulation at EU level regarding biomass for electricity and heat.

A 2012 report for the European Commission proposes sustainability criteria andindicators for energy biomass. The European Environment Agency underlines that policymeasures preventing negative impacts on natural resources and biodiversity wouldreduce GHG emissions. However, the IISAS study mentioned above suggests that forestbiomass potential would be reduced by up to 30% if stringent sustainabilityrequirements were in force.

A number of experts highlight resource-efficiency as a guiding principle when usingbiomass for energy. This could be implemented inter alia through a cascading use ofbiomass, whereby biomass is used more than once, typically with material use(s) as thefirst step(s) and energy conversion as the last step. Based on a sequence of choicesabout material and energy uses for biomass, this principle would seek to ensure alonger lifespan, the highest value possible and/or production of various streams fromone source. A 2012 study by CE Delft, a consultancy, estimates that implementing thecascading use of biomass could contribute 10–12% to the EU emissions reduction targetby 2030. However, other experts point out that for some biomass types (e.g. forestresidues), energy conversion is the sole economically viable or available option.

The European Parliament's positionParliament called, in its resolution of 9 July 2015 on the circular economy, for theimplementation of a cascading use of resources, notably in the use of biomass. It alsoasked the Commission, in its resolution of 5 February 2014 on the 2030 climate andenergy policies framework, to propose sustainability criteria for solid and gaseousbiomass, taking into account lifecycle greenhouse gas emissions in order to limit theinefficient use of biomass resources. However, in its resolution of 28 April 2015 on anew EU forest strategy, Parliament also recognised the value of wood for energypurposes and opposed legally binding rules for prioritising the uses of wood, as thiswould restrict the development of new and innovative uses of biomass.

Stakeholders' viewsEnvironmental NGOs BirdLife, European Environmental Bureau, and Transport &Environment advocate reassessing the assumption of biomass carbon neutrality,introducing new carbon accounting methods and improving reporting and transparencyunder the EU ETS. They also support ambitious environmental safeguards, with a viewto ensuring that biomass use for energy is only incentivised when it delivers GHGemissions reductions, and call for a cap on the maximum contribution of biomass to EUrenewable energy targets. FERN, an NGO focusing on forests, advocates EU-widebinding sustainability criteria, measures based on the cascading use principle, andphasing out biomass use in large power plants.

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With regard to carbon emissions accounting, biomass sector association AEBIOMhighlights that emissions from biomass are offset by the growing amount of forest inthe EU, while substituting biomass for coal reduces overall CO2 emissions. Regarding thecascading use of biomass, the Confederation of European Forest Owners, Europeanfarmers and agri-cooperatives (Copa-Cogeca) and the European Landowners'Organisation believe it would disrupt the market, as illustrated by Sweden's experience,and would prove impossible to implement on the ground. Instead, they advocatemeasures securing forest productivity and wood mobilisation. AEBIOM and Eurelectriccall for EU-wide binding sustainability criteria for biomass based on reliable science andfocusing on major environmental concerns.

Main referencesEU bioenergy potential from a resource efficiency perspective, European Environment Agency,2013.

Recycling agricultural, forestry & food wastes and residues for sustainable bioenergy andbiomaterials. Technology options for feeding 10 billion people, European Parliament, DG IPOL,2013.

Endnotes1 Conversion efficiency varies according to the conversion pathway. For biomass, the minimum conversion

efficiency is set at 85% for residential and commercial applications and 70% for industrial applications. Estimatesprovided in a 2013 report by the European Environment Agency suggest that three conversion routes meet thesecriteria: 'combustion to produce heat only' (efficiency of at least 85%), 'solid biomass cogeneration' (efficiencybetween 65% and 85%), and 'biogas/biomethane' (efficiency between 50% and 85%).

2 The United Nations Framework Convention on Climate Change (UNFCCC) and its protocols (in particular the KyotoProtocol).

3 The Tilbury power plant was closed in 2013 because it failed to qualify for government incentives to burn biomassinstead of coal, despite its partial conversion to biomass in 2012. The Lynemouth coal power plant receivedgovernment support for its conversion to biomass in 2014, although the European Commission subsequentlyopened an investigation into the legality of the state aid granted. The Drax coal power plant, the UK's largestpower plant, is in the process of partial conversion to biomass, enabling it to claim government subsidies in theform of 'renewable obligation certificates'.

4 A review of the implementation of these recommendations by Member States found that about half of them haveadopted rules promoting higher efficiency in energy production, but only a few have implemented GHG-savingcriteria; some have introduced sustainable forest management criteria; and a number have introduced rulesaddressing competition with other biomass uses.

5 The main reason for the high emission savings is that biogas produced from wet manure enables to avoidemissions of methane, a powerful greenhouse gas.

6 According to a Chatham House study to be published in autumn 2015.

Disclaimer and CopyrightThe content of this document is the sole responsibility of the author and any opinions expressed thereindo not necessarily represent the official position of the European Parliament. It is addressed to theMembers and staff of the EP for their parliamentary work. Reproduction and translation for non-commercial purposes are authorised, provided the source is acknowledged and the European Parliament isgiven prior notice and sent a copy.

© European Union, 2015.

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